CIVIL OR PRIVATE LAW, and
BUSINESS OR COMMERCIAL LAW
business law, referred to also as commercial law or mercantile law, is really the body of rules, available between persons in commercial matters based on convention, agreement, or national or international legislation.
Business law is divided into two main areas: (1) the regulation of commercial entities by the laws of company, partnership, agency, and bankruptcy and (2) the regulation of contracts based on commercial transactions.
In civil-law countries (Western-Europe), company law consists of statute law; in common-law (developed through Judges based on precedent through the Commonwealth nation) countries. Statute law consists of the ordinary rules of common law and equity and statute law. To understand statute law one needs to be familiar with the concept of legal personality and the theory of limited liability. These last two concepts were created using rules of statute and are intended to protect creditors and investors.
The legal form of a business determines the laws enforced. Examples include the sole trader for instance. Such a person bares 100% of risk and responsibility for running a business and is actually him or herself in legal association with the company. Alternately, is the limited liability, multinational corporation, or partnership. These forms vary their participation in management and sharing profits, or amount of bearing-liability for the firm’s debts or being sued in relation to the firm’s contracts or tortious acts. With all partners acting as agents who owe a fiduciary duty to act with responsibility and due diligence.
In certain circumstances business entities might be unable to perform their financial obligations. This may happen when a person or company is insolvent (i.e., unable to pay debts as and when they fall due). If this happens, the court may take over the administration of an estate and make a final distribution of assets to creditors based on a fair and equal distribution of property . Attempts should be made to free the debtor from outstanding debts, and enquire into the reasons or legitimacy of the insolvency.
Business law touches everyday lives as we enter into contractual dealings. A contract, is normally designed to allow for some exchange of goods or services at an agreed upon price. It is a legally binding agreement between two or more persons and is enforceable by the courts. As such the contract may be entered into through oral or written means. In the making of a valid contract there must exist: an offer and unqualified acceptance (intention to create legal relations, valuable consideration, and genuine consent, i.e., an absence of fraud).
Due to ongoing and specific commercial transactions, specific bodies of law have been created with regards to scope and protection. These include (1) sale of goods—i.e., applicable terms, conditions, performance, breach and remedies available to both parties; (2) transportation of goods across national and international borders. These rules governing insurance, bills of lading, charter parties, and arbitrations; (3) agreements related to consumer credit; and (4) labour relations which involve the determination of contractual rights and obligations between employers, employees and right to act by trade unions.
Business law, in relation to consumer protection, competition, and computers and the Internet is continuously changing on both national and international levels.